ITC has registered a 5.7 per cent year-on-year (YoY) growth in net profit to Rs 2,646.73 crore for the quarter ended December 31, 2016, higher than analysts’ estimates of Rs 2,550 crore. The Kolkata-headquartered conglomerate had notched up a net profit of Rs 2,503.76 crore in the same quarter of the last financial year.
During Q3, ITC’s total income increased 4.7 per cent to Rs 13,570 crore compared to Rs 12,962 crore in the previous fiscal and EBITDA grew 2.1 per cent at Rs 3546.35 crore as against Rs 3474.6 crore in the year-ago period, while margins stood at 26.1 per cent versus 26.8 per cent year-on-year.
The revenue of the company from cigarette business rose 2.2 per cent on a YoY basis to Rs 8,287.97 crore compared to Rs 8,106.31 crore reported in the year-ago period. The revenue from non-FMCG segment grew by 3.4 per cent on a YoY basis to Rs 2,569.26 crore compared to Rs 2,484.91 crore in the corresponding quarter of last fiscal.
The revenue growth of FMCG-others segment happened amidst lower consumer offtake and reduction of trade pipelines in the wake of cash crunch during the quarter. The segment’s results reflected the impact of disruption in sales momentum due to adverse liquidity conditions in trade channel, sharp escalation in input cost, gestation cost of new categories and sustained investment in brand building.
Legal cigarette industry volumes remained under severe pressure even as illegal trade grows unabated. Hotels segment revenue was up 7 per cent, riding on higher average room rate and robust growth in F&B revenue.
“The operating environment was extremely challenging during the quarter. FMCG sales were adversely impacted as a result of lower consumer offtake and reduction in trade pipelines, particularly in the immediate aftermath of the government’s decision to withdraw specified high denomination currency notes. While the impact was felt across all segments, sales of biscuits, snacks, noodles, personal care products and branded apparel were impacted the most in the initial phase,” said an official communique from the company.
The announcement of financial results coincided with the appointment of wholetime director Sanjiv Puri as the chief executive officer (CEO) of the company with effect from February 5 with independent charge of the executive leadership of the firm. YC Deveshwar, chairman and non-executive director with effect from February 5, will play the role of mentor. The company also appointed David Robert Simpson as an additional non-executive director of the company with effect from Friday. The ITC board on Friday also granted 15,000 options under the ITC employee stock options scheme-2010 to one eligible employee of the company. The vesting period will commence from a period of one year from the date of granting options and will extend up to three years.